Kudos and props to Nowdy as all that time and hard work she put in reorganizing our legal pages has been recognized in the media. Jeff Amy has the story for the Mobile Press Register:
Pilot Catastrophe Services Inc. has been dismissed from a federal lawsuit in New Orleans that claims insurers overbilled the National Flood Insurance Program for flood damage so they could pay policyholders less for wind damage from 2005’s Hurricane Katrina.
The Monday ruling allowed the whistleblower suit by Branch Consultants, a group of former insurance adjusters, to go forward after two years of wrangling. But it severed Pilot and two other adjusting firms — NCA Group and Crawford & Co. — from the case.
State Farm Fire and Casualty Co. and Allstate Corp. were removed earlier. Left as defendants are Travelers unit Standard Fire Insurance Co., Liberty Mutual Fire Insurance Co., American National Property & Casualty Co., Fidelity National Property and Casualty Insurance Co., American Reliable Insurance Co., Colonial Claims Corp. and Simsol Insurance Services Inc.
Insurers say there’s no merit to claims that they pumped up flood damage and reduced estimates for wind damage to increase their profits. A similar suit is pending in Mississippi.
The long and short of Judge Vance’s latest order in the Branch Qui Tam case is LETS GET IT ON BECAUSE THIS BABY IS HEADED TO TRIAL. In a 69 page order and reasons Judge Vance lays out a well reasoned legal opinion with only one hiccup for the plaintiffs which we find on page 54:
Pilot Catastrophe Services, Crawford & Company, and NCA Group must be dismissed without prejudice
But even there the news isn’t so bad for the good guys as Judge Vance continues:
the Court grants Branch the opportunity to amend its complaint to allege an adequate factual basis for its allegations.
Rebecca Mowbray at the Times Picayune picks up the coverage:
The whistleblower suit alleging that insurance companies overbilled the National Flood Insurance Program for flood damage so they could get away with paying policyholders less money for wind damage from Hurricane Katrina is about to begin subpoenaing claim files to get to the heart of the case.
Thanks to a 69-page ruling by U.S. District Court Judge Sarah Vance Monday that severed several adjusting firms from the proceedings, the procedural phase of the case is over after two years of motions and appeals.
“We’re now in a position where we can start discovery,” said Allan Kanner, attorney for the Branch Consultants, a group of former insurance adjusters who discovered unusual patterns of how insurers allocated the bills for hurricane damage, and filed suit. “While it doesn’t eclipse the Saints’ victory, it’s one of the best things that’s happened to us in a long time.” Continue reading “Federal District Court Judge offers tutorial Part Deux: Judge Sarah Vance Educates Insurers about Federal Court Jurisdiction in False Claims Act Cases – A Branch Qui Tam Update”
Intended as a tutorial or not, Louisiana Federal District Court Judge Sarah Vance wrote one in her pick ’em up – put ’em down examination of the case law on proof of loss and segregation of damages. Follow her through the process that leads to an insurer must also make a specific showing of what damage was caused by the excluded cause. (Order and Reasons Imperial Trading v Travelers )
The plaintiffs in this case are the owners and lessees of commercial properties that were damaged during Hurricane Katrina. At the time of the hurricane, the properties in question were insured by defendant Travelers Property Casualty Company of America. Plaintiffs submitted a claim to Travelers shortly after the hurricane, and Travelers advanced plaintiffs $1 million for the covered losses to one property on September 25, 2005. Plaintiffs claim that Travelers failed to participate in the adjustment process in good faith after that point, reimbursing plaintiffs for portions of the covered loss in small increments over the following year but denying coverage for several claims falling under the coverage of the policy.
The plaintiff’s claim at issue in this order is for a loss of more than $8,000,000. Both parties filed motions for partial summary judgment – plaintiffs’ as to burdens of proof and segregating damages; defendant’s as to plaintiffs’ claim for damages to contents.
The parties agree that such stock was covered by the insurance policy and that it was damaged. The policy notes that the insurer “will pay for direct physical loss or damage to Covered Property caused by or resulting from a Covered Cause of Loss.” “Covered Cause of Loss” is defined as “risks of direct physical loss” unless the loss falls into a particular exclusion. “Stock” is included among the Covered Property section, and is defined elsewhere as “merchandise held in storage for sale, raw materials and inprocess or finished goods, including supplies used in their packing or shipping.”
The Lesson: Who bears the burden of segregating covered from non-covered losses once and insurer shows that an exclusion applies to some loss? Continue reading “Federal District Court Judge offers tutorial – proof of loss and segregation of damages”